January 5, 2014
I own a self-storage business. We currently own three properties, are profitable, but we will be limited from adding other properties without attracting outside investors. I am interested in the Regulation A expanded limits because the $50 million limit would allow us to add on around a dozen properties. We have already added three jobs to the economy within the limits of our own personal investment and could probably add five times that with additional investment. If the JOBS act is about adding jobs through a strengthened economy, then this is a win for the country and the company.
I saw in the draft that there was a question about whether the Regulation A should permit or exempt Real Estate Investment Trusts. While my business is not currently an REIT, if we were to successfully grow our business through a Regulation A offering and had the necessary shareholders, attaining an REIT status would be desirable for our new shareholders to eliminate the double taxation that comes with that situation. While I understand the SEC's interest in adequate disclosures, investor material accuracy and consumer protections from securities fraud, I do not understand why the SEC would have any concern about the tax classification of the offering entity, as long as the entity qualifies for REIT status and the tax code allows it.
In my particular business, this new proposed regulation could allow our business to grow and add jobs. I would recommend that the SEC allow firms with REIT status to participate or allow companies to seek REIT status after their offering.
Respectfully,
Dave Kolstedt
Serenity Storage
Buffalo, MO